What Gets Cheaper, And Costlier After RBI Keeps Repo Rate Unchanged

The Reserve Bank of India (RBI) has decided to maintain the repo rate at 5.25 per cent as stated in its June 2026 MPC meeting. RBI has retained a neutral policy stance. This move signals a cautious approach amid global uncertainties, rising energy costs, and inflation risks. This decision means borrowing and deposit rates are unlikely to witness any sudden changes.

This decision, however, impacts several financial tools in the market, such as loans, imports, and fixed deposits (FDs).

What Becomes Cheaper?

Home Loans Stay Affordable

For the existing borrowers who have floating-rate home loans, monthly EMIs are expected to remain unchanged. Since the repo rate has not increased, banks are not under any pressure to raise the lending rates. This provides stability to homebuyers and those planning to purchase property in the coming months.

Specified Loans

Interest rates on car loans, personal loans, and other credit products are also likely to remain stable. Borrowers will not be facing any higher repayment responsibility due to a rate hike.

Corporate Borrowing Costs

Businesses that are seeking loans for expansion or working capital requirements can continue to access credit at the existing rates. Stable borrowing costs continue to encourage investment activity despite the global economic headwind.

What Remains Costlier?

Fixed Deposit Returns May Not Improve

For the FD investors, who were expecting a rate hike due to rising inflation, there’s a stagnant return expected in the coming months. However, with the RBI choosing to keep the rates unchanged, banks have little incentive to increase FD interest rates. As a result, depositors are unlikely to see a high return in the near term.

Imported Goods

The RBI highlighted concerns regarding a weakening rupee and rising global commodity prices. A weaker rupee can increase the cost of imported goods.

The RBI has also highlighted that there are concerns regarding a weakening rupee and rising global commodity prices. However, with the RBI choosing to keep the rates unchanged, banks have little incentive to increase FD rates, as per a report by the Economic Times.

Fuel and Transportation Costs

Global crude oil prices remain elevated due to the geopolitical tensions in West Asia. If the pressures persist, fuel prices and transportation costs may rise significantly. This would affect the household budgets severely.

This decision offers a short-term relief to borrowers by keeping interest rates stable. However, inflationary pressures persist, which can be a huge concern for citizens in the future if the global tensions are not relaxed.